Factors affecting the attitude of trust in Internet - journal-archieves8

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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

VOL 3, NO 5

Factors affecting the attitude of trust in Internet purchasing from the perspective of consumers Fatah al-Amiri Aghdaie University of Isfahan, Iran Faculty of Administrative Science & Economics Department of Management Saeed Fathi University of Isfahan, Iran Faculty of Administrative Science & Economics Department of Management Amir Piraman (Corresponding author) University of Isfahan, Iran Faculty of Administrative Science & Economics Department of Management Abstract In B to C model of the e-commerce, customer trust is one of the key success factors. Many experts know creating and developing secure and reliable process, will be the key of success in Internet shopping. Yet the meaning of customer trust in e-commerce is still shrouded in mystery convention. The aim of present study is to examine factors that affecting the formation trust. This research is based on data that obtained through a survey study. This study establishes factors affecting the attitude of trust in online buying. In this study, the hypotheses were presented considering the variables were associated with trust and technology acceptance model that in 1985 by Davis was presented. In this regard, factors were considered in the overall format of the trustee, trustor and environmental factors to form online trust. Hypotheses were tested by Spss and Amos software and finally became clear in spite of some of the main factors that do not affect on trust attitude, sub factors may be affecting on trust formation. Keywords: Trust Attitude, Perceived Usefulness, Perceived Ease Of Use 1. Introduction Internet as a commercial medium, make it easy to companies to establish mutual online environments and Allows consumers to collect data and measure them, Evaluate the intentions to purchase and purchase products directly and easily.(Ranganathan & Sanjeev, 2007) With the advent of electronic trading in early 1990, Web-based retail has led to a global phenomenon that increased worldwide sales.(Ranganathan & Sanjeev, 2007) . Because of convenience, ease of data collection, the ability to compare prices, wider choice of products and services and saving time, online shopping is increased. Consumer trust in online transactions significantly more important than in traditional markets, and therefore creating higher trust in online transactions is far more difficult than traditional businesses. Due to the uncertainty, the unknown, lack of control and potential opportunism, the exchange in an online environment requires trust as an important element (Shankar et al, 2002)

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VOL 3, NO 5 Despite the optimistic views of online shopping, the proceeds of this operation are still less compared with traditional retail. Compared with traditional procurement, risk in online shopping is much higher. Furthermore shopping is a form of socialization, but Social face to face behavior in the internet and the virtual environment is different from what people have experienced in a traditional environment.


Normally it is difficult to define trust especially because of its various meanings. Lack of trust in e-commerce component is considered as one of the main reasons for crashing some dot-com companies. Researches have shown that trust is a key element in e-commerce success. However, this question that how trust is achieved and maintained has not been answered correctly. Lack of customer trust in e-commerce merchants, ecommerce technologies and social, financial and legal infrastructure of e-commerce, has provided a major challenge in understanding the relationship between business and e-commerce customers. One of the challenges that online merchants are facing, is consumer trust, when consumers spread throughout the world, controllable trusted sources are not readily available to merchants. (Jarvenpaa & Tractinsky, 1999) 1.1 Trust

Especially when a business is run in an uncertain environment, the business transactions require trust factors. Trust in electronic commerce is a confidence level that shows how a trustor’s intentions and actions are perfect during an interaction. A client should believe that online transactions are consistent with his/her beliefs and expectations. (Liu et al, 2005) It seems that lack of trust in e-commerce transactions sources can be considered from two sides: 1. 2.

Consumer do not control over the Internet merchants who access to personal information Consumers have no control over the use of information for other purposes

The concern is that online merchants sell consumer personal information without their approvals (Lee 2007). Note that there is no single and clear definition of trust and it is usually considered as confidence, belief and reliance. (Roger & James, 1995) Below is expressed some definition: • • • •

Confidence or rely on some features of a trustee or an organization Accept or give credit to the trustee or organization without receiving evidence Believe it or relying on the honesty of a trustee or organization Honesty, integrity and loyalty

Webster define trust as relying on certain people or objects and depending on the characteristics, abilities, strength and integrity of individuals (Webster, 2004) .Trust is a kind of Confidence that people are deserved and their performance are predictable and rely on ethics (Joseph & Winston, 2005). Slyke defined trust as “trustor expectation of trustee motivation and behavior”, in this definition trustor is online merchant and trustee is online consumer (Schneiderman, 2000) Both of interpersonal trust and institutional trust in online shopping take into consideration. While Interpersonal trust is established between merchants and online consumers, institutional trust is established between the consumer and computer. Sometimes electronic transactions are done where there is no awareness about online retailers. Trust in trading helps reducing the complexity of social relations and consumers can reduce mental concerns of improper behavior of e-retailers through trust. Internet businessman requires trust making, transparency value and the long-term relationships with his consumers. Consumers’ trust in online transactions is more important than the traditional markets. Because of the uncertainty, the unknown, lack of control and potential opportunism, the transactions in online environments are associated with greater concerns (Shankar &Urban, 2002). Lee showed trust has a direct influence on the attitude (Lee, 2009). Trust also plays a key role in customer buying decisions (Benamati & Serva, 2007; Riegelsberger et al, 2005). Other researchers have shown that trust increases ensuring to business relationship and determines the quality of transactions between buyers and sellers. (Lewis, 1995) 2. Research background and hypothesis development Since the concept of trust is taken from different areas, it is a multidimensional phenomenon that is related to the specific understanding of risks individual fields. Although, trust building in a dynamic process involves several steps, some scholars believe that this trust is a concept of multi-level variables in which some of the internal relationship is static and some of external relationships will change over time. Therefore trust is considered a complex phenomenon and considering all aspects of it, is a complex problem. Due to the complexity of this realm and the fact that research on trust in electronic commerce is relatively a new topic, trust can be evaluated from different viewpoints. Despite the tendency for observing trust as a onedimensional phenomenon, the trust has more than one dimension. These dimensions are summarized in three specification: trustee, trustor and factors associated with infrastructure and environment.


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2.1 Trustor factors

Trustor characteristics are those factors that influence tendency to trust and can be associated with the psychological, interpersonal, experiential and cultural features that influence the process of trusting to others. In this study trust propensity (Shankar et al, 2002; Jones & Leonard, 2008; Li et al, 2008) and skills and experience in computers and internet (Lai et al, 2010) are considered as trustor factors . 2.1.1 Trust propensity

Perception of risk varies from a trustor, product and or service to other trustors, products or services as everyone may not consider the risk the same. In internet transactions typically provide information such as address, telephone number and financial information are required. Furthermore providing such information, particularly in the area of financial fraud is very worryisome (March, 2006). Individual general tendency to trust people is a criterion to trust or distrust people. If you believe that people are generally good in nature, and trust to others causes a good result, you will more likely want to trust others (Teo & Liu, 2007). Researchers have shown willingness and disposition to trust will have a positive impact on trust when consumer trust develops in the business environment (Lu et al, 2010). Finally, tend to trust has the biggest impact on people's trust (Beldad et al, 2010) 2.1.2 skill & experience

examining someone who have purchased from internet , scholars believe that it is clear that past experience can impact plans to deal with the websites.( Chiu et al, 2010) Studies have shown customer satisfaction positively affected trust in electronic commerce. If customers have the more satisfying experience, they will perceive higher trust level based on their past experiences. In addition, satisfied customers will more desired to establish long-term relationship with the vendors (Yeh & Li, 2009). 2.2 Trustee factors

People may make a decision to whether trust other or not based on the trustees’ characteristics and this decision is based on an assessment of individual factors. Ability, benevolence and integrity are known as the reliable factors. Trustee characteristics can divided to two parts: first, some properties such as size and reputation which are related to merchants or companies, second features such as security-related, design and appearance of the web sites. Furthermore, factors such as perceived quality of data and lack of error (Kim et al, 2005; Hoffman et al, 1999; Chiu et al, 2010) graphic and design features (Jones & Leonard, 2008;Beldad et al, 2010) and Reputation and past performance may be considered either (Eastlick et al, 2006) . In each trade two things is very important, one is the methods of payment for goods and services and other is relating to the exchange of goods or service. Payment system can effects trust to others (Kim et al, 2010) and delivery systems that include the guarantee of delivery in specified time and quality, return the goods Systems can influence building trust process. (Kolsaker & Payene, 2002) 2.2.1 Data Quality

When customers trust a website which contains guaranteed information such as the quality, they are concerned about the honesty of the dealer , his claims about the products and the influx of unwanted messages (Kim et al, 2005) Without any trust, interactions between customers and vendors will be limited (March, 2006). Providing useful information can lead to improved awareness and perceptions of the brand. The researchers have shown that non-relevant information may reduce consumers' trust about the products' ability in value creation. (Ha, 2004) As customers expect every website to be free of errors, they likely trust to websites which contain good information timely and fully. Several studies have shown that providing clear and complete information in health website have increase trust to web. (Beldad et al, 2010) 2.2.2 Graphic design

Since an effective plan attracts customers and catches their attention to the web sites, an aesthetic design is an important tool in developing trust. The design aesthetic is defined as beauty that through factors such as colors, shapes, language, songs and animations can be expressed. (Li & Yeh, 2010) Kim and Moran evaluated the impact of graphical features such as color and the artistic images in designing the database of a bank website. The study showed that as the dynamic three-dimensional images increased, the users feeling about the reliability of the banking system get better (Beldad, 2010). One important feature of websites, is the ability of the website in increasing the consumers tendency to have relationship with the website. This can be done through providing entertainment for customers, allowing them to have feedback and having contact with the consumer through email that allow customer to return to the site and use it for a long-term. Entertainment can include photos, display products, animations and online games. (Samaniego et al, 2006) so when new areas to be like a known environment , people feel that things done as they should be, So easily understand what should happen (Lu et al, 2010) Help is an important measure for the effectiveness COPY RIGHT © 2011 Institute of Interdisciplinary Business Research

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VOL 3, NO 5 of the website performance and includes web designer’s technical skills, operations efficiency , and providing speedy useful guidance . So having the help and guidance tools shows that enough information should be considered in the design. (Kim et al, 2011)


2.2.3 Reputation and past performance

Second-hand information such as friends’ feedback and word of mouth advertising can affect the trust of Internet users. Researches have shown that vendor reputation and word of mouth in social networks influence the trust process in internet organization. Customers who don’t have previous experience, may rely on online retailer reputation. (Beldad et al, 2010) There is no surprise that the famous brand have more success on the Internet. Risk was reduced when customer is familiar with the brand. If customer trust in product or the organization, his perceived risk will be reduce so will be more likely inclined to trust (March, 2006). Researchers have concluded that the reputation is a valuable and tangible asset that requires long-term investments in resources, more efforts and focusing on customer relations. Furthermore Perceived reputation is especially associated with customers’ trust in online stores (Liu & Teo, 2007). Consequently sellers who have good reputations, should maintain their reputations. 2.2.4 Electronic payment systems and methods

When electronic commerce developed, the need for electronic payment service was peered and money and traditional means were used as a model for e-payment service. E-payment was defined as the electronic value that convey from payer to the recipient through payment mechanisms. The electronic payment services are the interface between the users which allow customers to access their bank account to deal and manage them .Generally, electronic payment systems can be categorized as following: •

• • •

•

Digital cash: In this way, a certain amount of money is associated with a specific number. Digital cash, mostly called electronic money and virtual money, can be transferred via computer or telephone communication tools. Because of the low cost of electronic money, it has become one of the most widely used methods. Debit card: this is a card with specific value that has been issued by merchants and can be generally used in stores. This cards can be purchased as a gift or a tool and used to facilitate shopping Credit card: Credit cards design for purchases in the traditional way but are used in electronic payment. Security is the most important problem of these cards. Pre-paid cards: This is the most frequently used methods that works with combination of bank ATMs and internet banking systems. This is combination of automated cash machines and electronic banking by which completion transaction cash will be conveyed from the client account to the seller's account. Payment on delivery: After completing the purchase, a customer puts her /his name, address and telephone on e-commerce web site in this payment stage. Sales staffs will contact clients and after examining the purchase information, the cost of the goods is received on delivery time.

As an electronic payment system has many advantages over traditional payment system, it should also be freed from any security abuse and therefore is the security of electronic payment systems is the success factor. Although many security tools and mechanisms created for electronic payments, there are still security problems. Hence the need to reduce risks which are related to process of electronic payment transactions is growing. (Kim et al, 2010). Studies have shown that the written payment as a sign of confidence, increase trust in merchant. (Gregory et al, 2003) 2.2.5 Delivery system

It includes factors such as price, payment options, financial planning, after sales services, promotion and delivery. Another important aspect of transaction is how to exchange the product or service and how to offer after sales service. (Kim et al, 2005) .Some studies was examined the process of provide products or services. Delivery can create customers’ experience about the brand that draw through marketing channels .( Yeh & Li, 2009) Because of the nature of e-commerce and the failures in touching and delivering the specified goods, the perceived risk will be increased by customers after finishing of the shopping. The risk is a barrier to Internet shopping; especially for goods which purchased non-online normally. When customers receive a receipt for goods purchased, and they are able to track their order via internet, they likely tend to buy online. If there might be the possibility of returning the goods, consumers will be ensured that they can return the goods or solve the problems. Data protection Standards, refund policy and order tracking systems are factors that affect the trust. (Gregory et al, 2003) Lewis noted that when people feel the lack of confidence, oversee is necessary. The tracking order system allow customers to monitor the purchase process so the fear of possible abuse is Reduced. (Gregory COPY RIGHT © 2011 Institute of Interdisciplinary Business Research

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et al, 2003) 2.3 Environmental factors

Environmental characteristics are associated, with the level of risk and observed vulnerability and may depend on Elements such as the balance of power in relationships, government regulation, trustee alternatives. One of these factors are assurance and guarantees (Lee & Turban, 2001; Kim et al, 2005; Beldad et al, 2010). Government regulation (Kim et al, 2005; Shankar, 2002; Li et al, 2008) and promotion and advertising can be considered in this section 2.3.1 Assurance and guarantees

System assurance is defined as reliability and security of trading system that leads to the safe and successful Internet transactions. Ambrose and Johnson have concluded that trust in the reliability of transactions on the Internet is important for customers. Hence the system assurance features that customers are interacting with it, is critical in creation and maintaining customers’ trust. Researchers divide assurance into three categories • • •

Privacy assurance that provide information about the organizations privacy policy. Process assurance that examine the organizations process in completing order to be standard. Technical assurance refers to payment and order completion technology of the organizations and it’s safety (Beldad et al, 2010) .

When a Web site contains guarantees criteria, it increases the company's overall reliability (Kaplan & Nieschwietz, 2003) To increase trust, websites must convince their potential customers that their information will be protected . Web sites should apply the methods and mechanisms that increase the perceived reliability. These methods may include the privacy policy statements, third party guarantees, recommendation and customers’ satisfaction letters, incentives and other guarantees such as money back guarantee. (Peterson et al, 2007) 2.3.2 Rules and regulation

Legal safeguards like regulations, laws, guarantees, and contracts will facilitate trustors’ beliefs that the trustee will make every effort to fulfill the promises. Laws and regulations are in the area of structural guarantees that used by different researchers. Lee and colleagues associated structural guarantees with information systems, government agencies and public services and expressed that this factor facilitate the initial trust. (Li et al, 2008) 2.3.3 Promotions and advertising

Keller states that the brand is one of the facilitator to increase brand awareness. Word of mouth influence people knowledge and expectations, attitudes, behavioral intentions and ultimately behavior. Many researchers have shown that word of mouth advertising affects trust. As communities and online communication can affect the electronic trust, word of mouth advertising among communities’ members can increase trust in the Web. (Ha, 2004) 2.4 Perceived ease of use

Perceived ease of use is one of the main structural variables of technology acceptance model. It refers to users’ beliefs that using a particular system is without difficulty and effort. (Davis 1989). The model expresses that in equal situation users prefer to use websites which are easier to work with. In various studies the effect of ease of use on attitude is considered as an indirect effect. In other words, ease of use affects the usefulness and this is through usefulness that it influences attitude. But some studies insist that ease of used impacts on attitude directly.( Chiu et al, 2010; Yu & Tao, 2009) 2.5 Perceived usefulness

Similar to perceived ease of use, perceived usefulness is one of the main variables in technology acceptance model. It refers to trustors’ beliefs that using a particular system may improve their performances. Based on TAM, by evaluating cognitively, people decide to use information technology only if it influences their performance improvements. Studies by Amoako and colleagues in 2004 showed that ease of use can influence on consumers’ attitudes.( Amoako et al 2004) During the 2005 , Zain found the similar results (Zain et al, 2005). Other researchers evaluating perceived usefulness impact on Internet purchases. (Chiu et al, 2010) H 1: Environmental factors affect consumer trust attitudes in online shopping H 1-1: Promotion affects consumer trust attitudes in online shopping H 1-2: Governmental rules affect consumer trust attitudes in online shopping COPY RIGHT © 2011 Institute of Interdisciplinary Business Research

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H 1-3: Third party assurance affects consumer trust attitudes in online shopping H 2: Trustee factors affect consumer trust attitudes in online shopping H 2-1: Information quality affects consumer trust attitudes in online shopping H 2-2: Graphic design affects consumer trust attitudes in online shopping H 2-3: Reputation affects consumer trust attitudes in online shopping H 2-4: Payment methods affect consumer trust attitudes in online shopping H 2-5: Delivery affects consumer trust attitudes in online shopping H 3: Trustor factors affect consumer trust attitudes in online shopping H 3-1: Trust propensity affects consumer trust attitudes in online shopping H 3-2: Skill and experience affects consumer trust attitudes in online shopping H 4: Perceived ease of use affects consumer trust attitudes in online shopping H 5: Perceived usefulness affects consumer trust attitudes in online shopping H 6: Perceived ease of use affects Perceived usefulness in online shopping 3. Methodology This research can be categorized as descriptive survey research. The study population consisted of members of web site that have been purchase form web sites at least one time. The study is used of available random sampling. So that during the time of completing this research the questionnaire was distributed to online Members. Sample size based on Cochran formula and the accuracy of estimate of 0.087 that achieved from sample, and the error of α ═ 0.0 5 was 127. The data gathering instrument was a self administered questionnaire. All the items were measured using fivepoint Likert scale items with anchor points 1 = strongly disagree and 5 = strongly agree. To analyze the hypotheses of the study, one-sample τ-test has been used. To test the reliability of data gathering instrument, a preliminary study has been conducted with a sample of 30. The results of the primary sample show that Cronbach alpha (α) index is 0.84 that indicate a good reliability. Also for testing the existence of linear relations between variables, P.correlation was used. In this research we used Structural Equation Model (SEM) for testing hypothesis. For analyzing data we used the two steps Structural Equation model. For analyzing relation between constructs, in step one, we used Confirmatory factor analysis (CFA), and in other step Path Analysis have used. For determine that to what extent, indexes are acceptable for measuring patterns, first we must analyzing all of the measuring patterns separately. After review and confirmation pattern, for meaningful test of hypothesis we have used Critical Value (CV) index and P. Critical value is the ratio that resulted of dividing the “Regression Weight Estimation” on “Standard Error”. According to meaningful level of 0.05, critical value must above 1.96. Below this value, the related parameter in pattern is not considered important. And values below 0.05 for P value have showed meaningful difference in accounted value for regression weights with value of 0 in meaningful level of 0.95. 4. Data Analysis and Findings Table 1 shows demographic data. As it is shown, most of the respondents were female with 20 to 30 years of age. Their level of education falls mostly on categories of bachelor degree and amount of income falls mostly on category of more than 900$ a month. Table 2 represents descriptive statistics of variables. As it can be seen, some of variables have a mean value of less than 3 and others have a mean value more than 3 which among them the promotion has the minimum mean of 3.4333 while skill & experience has the greatest mean of 3.7404. Standard deviations range from 0.66035 to 0.93006. Table 3 represents the P.correlation among factors influencing on trust attitude. Also represent the P.correlation among independent variables. As it is shown, the correlation of most variables are significant at 95% confidence level (Sig (chi-square) is fit for measuring patterns. Goodness-of-fit index (GFI) 0.05, could result that the ratio of for all measuring patterns is above 0.9 (GFI > 0.9), showed that data are fit to patterns. RMR for all measuring patterns is below 0.05 (RMR 0.05, could result that the ratio of (chi-square) is fit for that pattern. Goodness-of-fit (GFI) for pattern is 0.993(GFI >0.9), showed that there is not little difference between reproduced and observed variance and co-variance, and it represented the good fitness of pattern. RMR for mentioned pattern is 0.006(RMR < 0.05), that is little and showed little error in pattern and good fitness of it. Comparative fit index (CFI) for mentioned pattern is 0.999 (CFI >0.05) and showed that the fitness of pattern is good. RMSEA for pattern is 0.023(RMSEA trustee Information quality ---> Ease of use Payment methods ---> Ease of use Ease of use ---> Trust attitude reputation ---> trustee Trust attitude ---> trustee

Estimate 0.951 0.514 0.330 0.410 0.316 0.557 0.516


C.R. 4.703 5.873 4.200 5.217 4.075 5.873 4.881

P 0.000 0.000 0.000 0.000 0.000 0.000 0.000

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